Claims about North Dakota

If you have a license and no criminal record, you can get a six-figure trucking job almost overnight.

The article is here, hat tip goes to Garett Jones on Twitter. If your response is: “How many of the unemployed could get work in North Dakota?” you have missed the point.

You can find some of the ads here, and more broadly here. My poking around showed that some of them start at 75k a year, though with raises for good performance. It is also required that you have no DUI convictions. The sense of community is strong and the State Capitol is an Art Deco masterpiece. You can get Canadian TV. What more could anyone want?

Ape Man

CDL-A with a hazmat endorsement will almost get you that kind of wage where I live. In fact, if you have that kind of license, you can get a job just about overnight anywhere in the country. They just might not all pay 6 figures. Still, the figure that Tyler is quoting is not that much of a premium.

Also, the yearly figure does not tell you much. How many hours are they working?

Having said that, they do make good wages even on a hourly basis around here.

Andrew Edwards

Wow, those jobs must be very unattractive in utility terms for that much money to be needed to draw relatively low-skill people in.

Which makes sense, I guess, though I hadn't really thought about it before. I can't imagine trying to have a family and also be a long-haul trucker. That you can buy "no chance at a good family life" for only $75K seems like the headline to me.

Dan Weber

In many ways it seems preferable to young guy working 80-hour weeks at a tech start-up. If your housing is paid for that's a lot of excess income you can save. By the time you are 28 you could have about a half-million in the bank. Pretty good outcome for "relatively low-skill."

Sid the sidious

I have truckers in my family. Let me just say that modern technology substantially reduces many of the emotional costs associated with long haul trucking (not to mention obvious other costs). Skype, cell-phones,
text messaging, GPS, to them they're blessings they can't imagine being without.

Attorney at Flaw

anthrosciguy

Talked to a woman who delivers trucks and RVs for a living; she won't take jobs that expect her to pay for the fuel because the pay just doesn't cover it. You get around 6mpg in a loaded semi, the semi you just spent $60,000-120,000 to buy, and the diesel you're buying is not the cheapest fuel anymore like it was 10 years ago; it's the most expensive.

I just looked online and found a guy listing his gross vs net pay (try a search for semi "net pay" and look through some forums):

Gross pay 3563.85/wk
Net pay $318.82 "and that's before taxes or CR England's accounting service ($210 per quarter)" and this was a no tolls week; he said tolls added 80-120/wk when he is on runs that have them.

Sp that's less than $17,000/yr net, before taxes and assuming you work full time and take no vacations whatsoever. Wanna sign up?

Ape Man

If you truly know people who are doing that badly in trucking and don't have a bad driving record and can pass a clean drug test, tell them to look up Maines Paper and Food services inc. https://maines.hyrell.com/Positions.aspx?keyword=

Honestly, they can look up just about any decent company and I think that they will do way better than you describe. But I know they will at Maines.

KLO

As someone close to the trucking industry, I can tell you that two things make employing truckers difficult:

(1) Drug testing.
(2) Child support obligations.

The number of candidates and drivers who fail drug tests is staggering. I am not talking about performance enhancing drugs either. Guys will show up for an interview when they know they will be drug tested and still fail an opiate test. This happens over and over. A trucker without a drug habit is a gold mine for a trucking company.

Truckers with child support obligations frequently move from state to state to avoid wage garnishment. As soon as the state they are working in catches up with them and starts garnishing their wages, they move on to another job in another state. This is generally pretty easy to do, because trucking jobs are pretty much all the same across the country.

The Engineer

JonF

I have never understood why people who know they have an upcoming drug test can't just abstain in order to pass it. Pot especially is not dependence-inducing and there's no withdrawl to deal with. And are there really that many hard drug addicts around (as opposed to casual occasional users)?

The other coyote

We had a guy show up drunk to a pre-employment drug/alcohol screen. When I started with the company I asked why they screened for alcohol and the response was it's an intelligence test. If you show up for a drug and alcohol test drunk, you are too stupid to work for us. To my knowledge it's only been the one guy for booze, but we have people fail pre-employment and random drug tests all the time. Lots of abuse of prescription painkillers out there.

Andrew Montgomery

For men, the lack of (available) women is a strong discentive. This happens all across the world in resource-rich boomtowns - Australian mining towns, Canadian oil shale towns, west coast goldrush towns of the 1800s, even Silicon Valley 20 years ago*. Women - especially the pretty ones - simply don't choose to live in boomtowns.

(*Salman Khan, founder of the Khan Academy, explained in an interview that he returned to Harvard in 2001 because “Silicon Valley in the late ’90s was the absolute worst place to find a wife or a girlfriend.”)

Adam

Jim Clay

I believe the point is that at the margin there are high-paying available jobs that are not being filled. Why aren't people moving to North Dakota and meeting the demand?

The comment about missing the point if you ask how many people could get jobs in North Dakota was to indicate that he realizes that we couldn't employ the millions of unemployed in ND, implicitly indicating that he is talking about the margin.

FXKLM

I think the point is that, even if North Dakota wouldn't be a large-scale solution to national unemployment, the overwhelming lack of willingness of the unemployed to move to North Dakota tells us something about the nature of the unemployed in America. To me, it says that they're not terribly motivated to find work, but I suppose there are other possible interpretations.

Jim Clay

Adam

NAME REDACTED

J'

It certainly says something about the nature of unemployment, but not that people are not terribly motivated to find work. A more apt statement is that the unemployed are still looking for something more than a job, which is probably a good thing (do we really want to be a nation of "jobbers").

I doubt few people who read this blog would realistically pack-up and head to North Dakota if they found themselves unemployed. Think to yourself what would actually get you to give up your career and place you call home and move to a remote part of the US to take a well paying, but boring and un-fulfilling job?
I'd also point out this move likely entails leaving your family where it is, as you can't sell your house.

Recessions wouldn't exist if people thought strictly in terms of dollars and cents, but they don't. They think in terms of broader utility when they are thinking rationally at all. Convincing a college grad to travel across the country to take a job that he could have gotten out of high-school, is not going to sell.

A more interesting question is if we upped the prestige, say required a university degree and provided a salary, would the wage go down? I suspect the engineers and other university grads are probably not making much more that this to take on similar working conditions (at least they aren't in places like Fort McMurray in Canada).

FXKLM

I have a boring and not terribly fulfilling job in a city that I don't like far from family. Admittedly, I make more than a truck driver in North Dakota, but I'd be perfectly willing to take the North Dakota job if the alternative were unemployment.

Most jobs are boring and un-fulfilling. Most of them lack prestige. But someone has to do them. If we keep funding unemployment benefits so that the unemployed aren't forced to take bad jobs, how is the bad but necessary work supposed to be done? You say that people don't think strictly in terms of dollars and cents in a recession. That's true only when they have some other source of income. When the only alternative is poverty, everyone thinks in terms of dollars and cents.

MC

J'

And what lead you to take your current job? I'm expecting the promise was something more than topping out at $75,000.00 a year. I also suspect, given the amount you are paid, your present job is slightly more interesting than driving a truck. In any event, given the salary you're making, it is difficult to accept that you've chosen a job you're not dedicated to. If you're not happy with your job, I'd be pretty annoyed as your employer.

On the more salient point of cutting unemployment benefits to force someone to take a job, you're effectively undermining the voluntary nature of the trade. Realistically there are a myriad of factors that prevent someone from going to North Dakota making the option nonviable as a choice. If I have to support a child, the option of becoming a truck driver is simply unfeasible. If I have a house I can't sell, telling me to absorb a loss of several thousand dollars is punitive.

Yes, people need to start taking the crap jobs, but a just and smart society can do this by making the crap job less crappy. That is not to cry union, it is simply to point out that if we want people to do a crap job we should make it less crappy.

I think everyone agrees that social programs need to be cut back to some degree, but the economy is not going to be helped by fomenting social unrest either nor will it be helped by increasing the immediate economic uncertainty of a good chunk of the population.

The other coyote

Honestly this is ridiculous. Since when is it society's obligation to make sure people feel fulfilled, and why in hell does anyone think they have the right to engage in social unrest just because they aren't happy at their jobs?

My grandfather left his family at home and traveled to California during the Great Depression looking for work. He took a job as a carpenter in the movie industry. My 8-greats grandfather left his home in Scotland and rode a leaky, crappy boat to Nova Scotia to try to make a better life for himself. Why Nova Scotia? Because he couldn't afford a ticket to New York. He walked to Illinois, bought a farm, and eventually brought his entire family, including the old folks, over. It's that willingness to face the unknown, work hard, and succeed by the sweat of your own brow that's missing in America. Until we get that back, we are nothing but a nation of whiney bitchez.

unblinkered

As tempting as it seems to be to project "unwillingness to work" onto the unemployed, after all it makes it simpler for the rest of us morally speaking, the likely scenario, given that typical job fairs, such as the opening of a new hotel in Detroit drawing applicants in the multiples of the available positions, is that for the long term unemployed moving in search of work is allot more complicated than it seems. Beyond uprooting yourself from your social support system, relatives, friends, kids school, etc. is the fact that as time passes, the depletion of financial resources begins to bunker someones mentality. There is a real and substantial hidden cost to moving, as there is to not moving. Likely a struggle between realism, delusion and fear is in play, until the "cost" of not taking the risk becomes high enough to motivate that leap forward. Just my 2 drachma (2012 circulation)

Alternatively it might tell us that 1), as has been pointed out here, the jobs are not "show up and start working," nor is the take-home pay anywhere near what Cowan suggests, or that 2), as has been pointed out here, N.D. is a lousy, god-forsaken place to live.

Just sayin . . .
JzB

TallDave

The perceived marginal value of work continues to fall. It wasn't all that long ago that not working meant you went hungry, among other privations. Now, we can probably agree it's a good thing the poor in America aren't suffering as much as they used to, but by the same token we should understand the different incentives in play and their consequences.

zatarra

I think the point is that but for government intervention people would move to where the jobs are. People on unemployment, or welfare benefits, are not moving to where the jobs are because they don't have to. Remove the benefits, and individuals will behave rationally and we will all be better off.

D

So someone would rather get a few hundred bucks a week than $75k per year? Interesting how classic financial incentives stop working at such a low threshold. Maybe CEO salaries should be cut to subsistence levels.

Alternative explanation: a lot of people are stuck in underwater mortgages.

I'm not talking just about delinquent mortgages. A friend of mine moved to Silicon Valley to take a great job with a major company there. She got a generous relocation package, but she nonetheless is starting to freak out because her house has been on the market for 6 months and no offers despite multiple price cuts. She now is paying rent in Mountain View (>$2k month for a tiny one-bedroom) *and* a mortgage

Her house is in Colorado, where the housing downturn was not nearly as bad as in places like Las Vegas, Florida etc.

If this is the state of labor mobility for higher end information workers, what do you think it is for blue collar types who managed to achieve the "American dream" of home ownership in, say 2006?

fred

You're ignoring the opposite of what Andrew points out, above. If you're a worker with a particularly high disutility of labor, then you might be very satisfied with a small stipend plus the *negative* disutility of labor. Imagine the young, single parent with low education. If that person ascribes a particularly high utility to family and leisure time and an entitlement program provides the necessities, then he or she would gladly sacrifice even a considerable increase in net income.

MD

fred

i didn't mean to imply that i was rejecting your theory of underwater mortgages as one of the causes at play. i was just taking issue with your logic, which as i read it was that 1) the *only* reason people aren't moving to new jobs is underwater mortgages, and 2) we know #1 because the phenomenon can't be explained by monetary incentives. my point was that monetary incentives don't tell the whole utility story, so we have to be careful not to toss the classical baby out with the bathwater. i agree that underwater mortgages are impeding economic restructuring, but i don't see why we can't have other causes contributing. that said, i don't know if the scenario i was describing is even one of them. i was just trying to point out that we shouldn't dismiss it out-of-hand.

JonF

And I think you are ignoring just how poor a stipend is provided by unemployment payments. On the average people on UI receive ~35% their previous income. Does anyone (other than those with substantial assets-- i.e., the rich) value leisure that much?
More to the point, do you know anyone who has been unemployed for a while in this recession? I do and these people do in fact want to work. So why aren't they moving to North Dakota to become truckers? Well, none of them has or can purchase a 120K trucking rig as one poster notes is required for these opportinities.

JonF

No one is "stuck" in a mortgage. And in fact plenty of people have bailed on underwater mortgages if they saw it in their interest to take the credit hit in exchange for getting out from under the obligation. In the case of someone who is unemployed it is absolutely in their interest to do so, and I would be amazed if a person who had no other impediments to moving to take a solid offer wouldn't let their house go (and of course the alternative of renting it exists as well)
A more likely culprit tieing people down is the reality of two income couples. If one person is working and must quit a job to move for the previously unemployed partner's new job, then the couple is no better off: there's still one unemployed partner in a foul job market.
In 2008 our office in Boca Raton closed and my department was offered relocation (all expenses paid and current salary maintained) to new jobs in Baltimore. Most of my coworkers did have houses/condos and mortgages, but that didn't stop anyone from going-- they rented the places out. What did prevent people from moving were family issues, most especially the spouse with a job problem. Of the coupled people who moved only one had a partner with a job-- that would be me, and my partner's job only paid about half what mine did and I had the benefits through mine.

Steven Kopits

The oil patch is a booming area of the economy now. Go to Houston and look around the parking lots of the oil fields services companies. (I'm a corporate finance guy: that's one way I do my cash flow and valuation analyses, really by reflex.) They're full of high end British, German and Italian metal. Why? A kid with a geology masters degree who goes to work for an oil major will get $115,000 right off the bat. A decent apartment rents for $1,000 a month in Houston, other costs are low, and you have plenty of money left to make the payment on your BMW M3. Heck, you can pay it off in a year. That's what's happening in Houston, and in the last few years, it's really begun to transform the city.

So everyone likes to complain about a lack of jobs for low skilled men, and then there they are, and everyone's complaining that there's not enough air conditioning. Oil field services--in the field--are physically demanding, blue collar jobs. That's just the way it is. And remember, there are plenty such jobs in places worse than North Dakota: Iraq, Angola, Sudan, and of course, California. From the Dakotas, you can still call your family whenevery you want and fly home pretty often. Try that in Sudan.

The shale oil jobs are really good news for a struggling economy (or more precisely, these jobs are the cause of the struggling economy). In any event, it's something we can celebrate in an otherwise difficult period.

Jamie_NYC

ralph

Ah, but if you trust the logic of the market the way you imply -- if the hard working jobs DO exist in a way that you state they do, you should see people flocking, should you not? The DO go, yes -- note that the discussion about jobs in Texas makes it clear that for employment purposes Texas does OK in this regard (not fantastically, but good enough relative taking population growth into account and all that). Yet, **relatively** unskilled labor is NOT filling these jobs in the numbers that are required to get anywhere close to growth patterns we typically think of as healthy and/or robust.

The existence of these jobs is not the interesting factor, in other words -- at least to me. It's the lack of "flocking" to them that is interesting. Tyler's got some very good structural thoughts about that (TGS), but since the collapse of the economy happened so fast, I don't buy that longer term trends are currently responsible. They may be, over a much longer period of time.....

Ape Man

For all practical purposes, there is a gas drilling boom around Binghamton (and yes, I spelled the name of the city right. Although given my track record I can forgive people for doubting me). The work is just half hour away in Pennsylvania. Hardly a bad commute for the pay on offer. Heck, a lot of the guys are being flown in from out of state. The gas companies love hiring people who are half way local.

But as I was wailing on about, it is hard to find skilled people who are willing to work. And really, you don't need to be skilled, you just have to be willing to work. They are paying ungodly wages for welders right now. There is a local trade school that will teach you the basics of welding and get you the basic certs in 6 months. So all the local unemployed young men are flocking to become welders right? Not.

The Anti-Gnostic

Nice People, Decent People have clean, carbon-neutral jobs like writin' and stuff.

"That you can buy 'no chance at a good family life' for only $75K seems like the headline to me."

First, young Americans aren't starting families. Second, 75K will buy you plenty when you don't spend $4 for a cup of coffee or insist on organic tofu. Third, there are countless examples through history to the present date of men spending long periods of time away from home in order to support their families. I've met tradesemen employed by hotel chains who spend most of every year on the road. Fishermen, soldiers, merchant seamen, astronauts...

The Anti-Gnostic

unblinkered

Latte drinking, organic tofu eating, effete types, is a specific characterization, with specific coded meaning, that is so tangentially connected to anyone resembling the millions of unemployed Americans that clearly you have some issues that require another forum to stoke, or to quench whatever it is that driving your rage.

Steven Kopits

ralph

I find it generally amusing -- read, troubling -- to rarely see anyone note the idea that moving a person (let alone family) to North Dakota (or in the Texas version, or anywhere else) is somehow cost-free or easy (and the actual moving part has nothing to do with labor regulations, even if taking advantage of the trucking jobs might). Yes, labor migrates; no, labor does not migrate "easily". Ask **any** immigrant. The costs are huge for anyone who does not already have the assets to move such distances. And if you have the assets to do so, the costs of doing so must be offset by far more than the same or slight higher living wage. There's a reason you can make -- in theory -- a bunch of money trucking in North Dakota. The only point I can see here is that **even at that wage** you can't get North Dakota to increase its working population, right? (Or at least not increase it sufficiently that it makes any macroeconomic-labor point in some political argument.)

I must say I'm not too convinced by a general "get rid of regulations and more jobs will appear" type of argument. This is of course true, for the most part, of course, because regulations slow down economica activity in order to achieve some political purpose. Safe trucking, for example, is one. (That is, safe trucking in advance of the free market, which might produce safe trucking but only if horrrendously unsafe trucking causes the populace to use safer trucking, yes? The point is to raise the standards of trucking prior to the accidents, not post. But, hey.) I am tremendously sympathetic to specific antiregulation arguments. If driving a truck safely doesn't require more than X amount of good training hours, then get rid of everything else in the way of people driving trucks safely. Those kinds of arguments are persuasive.

ralph

that's fine for you, Jim, and more power to you. However, if we're making economic arguments, the natural result is not that the workers are making irresponsible choices. No, instead they're making "rational", self-interested judgments. The jobs are not yet worth it to move there, given the skills required -- and, as the above commenters point out -- the additional "testable" requirements, too. In short, there is an actual dearth of possible labor for those jobs at that price.

Whether YOU think people should take those jobs at that price is immaterial; it's whether THEY think they should take those jobs at that price that matters. And at scale, not just "bob" or "al" or "luis" but at scale.... otherwise, it's just an anecdote.

L2P

Yeah, all those lazy unemployed bastards with a CDL, a clean record, and no accidents should move to Dakota! It's not like EVERY STATE IN THE NATION has jobs for long haul truckers. Why, you have to SEARCH THE INTERNET to find plum jobs like that! Heck, Los Angeles only has 50 openings at the port right now (too bad it's a socialist hellhole unlike Dakota, or I'm sure Tyler would have pointed you there)!

Christ, you libertarian types make me ill. I hope both your hands get stuck in a garbage disposal but we deny you disability anyway. If you're retired, I hope every dime you own gets lost in some ponzi scheme. If you're in college, I hope whatever career you start ends up getting outsourced to Nigeria when you're 40 and it's too late for you to do anything else but greeter at Walmart. Whatever happens, I'll laugh and tell you how you should move to Dakota and be a long haul trucker because Jesus don't weep for your selfish ass.

ralph

Heh. FYI and The Anonymouse have no idea why people do not actually take up these jobs **at scale**. But it's nice and it comforts the irritation zone to imagine that someone "pays them" to disincentivize their taking up those jobs. It is true that **any money** provided in the place of current residence will disincentivize anyone to move anywhere until the incentive to move becomes large enough. This is a truism in my world, and I trust, yours.

The fact that you seem to want to believe that having a society that forces people in poor enough circumstances to potentially destroy and at the very least radically change their lives just for **a chance** at a job in a place they don't know and don't have any roots in is a good thing. I don't. I'm totally fine with such political externalities -- because in fact they ARE political externalities. Yes, they alter the **economic effects** of the world around us, because they were designed to do so. Yes, they often have unintended effects, too, many of which are just useless and many of which are bad. These are true things.

But of course society gets some goods out of those "payments" it makes to those people, too. I support those goods; you don't seem to, and that's a fine political point. I reject your position myself, however. We get to go to the polls about that. Well, and argue here periodically, too....

FYI

Ralph,
First of all you assume that the only issue here is poverty. That is not the case. Someone who is forced to move because of a foreclosure is not necessarily starving to death (is there even such a thing in the US nowadays? I doubt it). You are right in that we do benefit from having a social safety net but like anything else there's got to be a breaking point. Obama wants to extend unemployment again - should we? What is the limit here?

When we talk about the current crisis and the fact that long term unemployment is a large chunck of the problem we have to re-evaluate our policies that impact unemployment. I think (Tyler might correct me if I am wrong) the point of the post os to show that if people are not even taking advantadge of clear and quite extreme opportunities like the ND ones there has to be something wrong with the current set of incentives that is favoring people to stay in place instead of moving. I understand that selling a house is more difficult (I moved in 2009 and it was hard - but by lowering the price of my house I did get it sold) but to say that unemployment and other welfare incentives are not a factor is just silly.

ralph

I can play the "heh" game, too. I hope you think that word is as powerful to you as you seem to think it is to me.

To The Anti-Gnostic: No, go ahead and ask any immigrant. Even the ones here on a happy H1B -- they know the work it took to get here, and you damned well know it. And if you ask the ones who worked their butts off to get here, legally or illegally, and you let them tell you how thrilled they are to have split or destroy their families, or compromised nastily here or there, they'll **largely** (because all such things are generalizations) tell you that they'd not rather have had to do it that way, but they felt they were compelled to.

And that is great that they did -- IF it worked out for them sufficiently. The real world isn't always that happy, whether you're an internal or external migrant. I, personally, would LOVE to throw the doors open to the workers of the world the way we used to; what a wonderful release of human energy that would be!!! But, alas, this will not happen, because voters want their government to help THEM, not help workers from elsewhere. Again, this reduces pure economic efficiency, but by (political) design. It's roughly what the majority of voters wanted, give or take this or that political slop.

whatever. I agree, politically and socially, with a safety net of **mildly disincentivizing payments**. It gives our society the ability to brace itself against social destabilization on a grand scale, and it invests in the **possibility** of rejuvenation of structurally un- and underemployed labor, and invests in the yet-untapped labor and potential skills of the future children that grow up in that world. We can of course also happily mock the fact that those people are not nearly as productive or successful at scale as people not mired in that world; feel free.

But if there are -- "at the margins" -- some jobs that do not offer enough money to overcome the costs of taking them up, I say that is simply not a persuasive argument that anything is wrong with the people, but rather with the job offers themselves. Still, even that is too harsh. Really, the point is that the supply of labor and the demand for those jobs haven't met yet on the ol' graph, and there's a reason. It's not "laziness", that's for sure. it IS part of that stickiness of wage demands that we were so recently pondering, though...

The Anti-Gnostic

D

What has changed about the unemployed now versus five years ago? Are they all just lazier? Doubtful. I'll buy depressed over lazy. And as someone who has suffered from depression several times through my life, I feel very sorry for those people.

FYI

Yup. Unfortunately, the American people in general have become way to spoiled to understand this. That is why Nancy Pelosi could tell an audience that Obamacare would 'free them to do art' and the country doesn't revolt. We are rich, we can afford paying people to stay home watching TV.

Well, at least we can pay the interest on loans that are used to pay these people. That is how Liberals figure that the current debt crisis is a 'manufactured' crisis.

FYI

gc

I don't understand the common argument that unemployment benefits are preventing people from taking jobs. Unemployment benefits are very low compared to other countries, most people would have problems paying their rent/mortgage on their unemployment benefits thus they are not taking it easy living on those, they are desparate for a job. Being homeless is a scary prospect. When you make this argument please provide details that make it plausible, i.e. average UI benefits vs average housing costs for the unemployed.

wtfci

Travelers they are. A new generation of young people are just traveling across the country by any means necessary. I've seen about two dozen of them at the same intersection just outside the Twin Cities. They are brought to that location by their social skills. They know what they are doing. They are asking for handouts because it's a lot faster to meet your needs than working for them while trying to move on to the next location.

A free beer buys you an awful lot of information from just about anyone.

whowhawhen

I'm not sure if it has been discussed about, but it would seem "skilled" labor is the real issue. I know they still call my father, a pipeline welder, retired for 6yrs, in Texas because they don't have enough that are able to pass the test.

Jack Burton Mercer

Matt

Tyler, It seems like you are presenting high unemployment as a puzzle to be explained, with the explanation offered being that the unemployed are not particularly motivated to look for and accept work (compared to previous business cycles?), because the living standard of the average unemployed American is reasonably high, or for some other unstated reason.

But I haven't seen you make the case that unemployment is a puzzle requiring explanation. Output is well below trend; there has been no recovery to what was a very severe recession. Under these conditions, one would expect 8-10% unemployment. That the unemployed are relatively dumb, lazy, stubborn etc. is probably a constant across business cycles and not playing a strong, independent causal role in how this one is unfolding.

If gdp growth since 2009 had been robust, and the recession V-shaped, THAT would invite some curioustiy over unemployment rates. Or, if unemployment was 5%, despite negative or flat growth for the past 4 years THAT would also be puzzling.

staticv

Dave Anderson

As others have noted, in good times, labor is fairly sticky to place as there are significant local and minimally monetizable social/firm specific capital that individuals possess in their current location. Yes, young men without families are probably the most mobile chunk of the workforce (Richard Florida might partially dissent with the "young men and women with a BS/MS and minimal student loan debt are the most mobile, and thus the best indicator of success/failure of a region...", but they still have local, sticky ties that need a big carrot for them to write-down/write-off.

It could be as simple as the labor pool that the truck companies want is fairly scarce AND they are not paying a high enough wage.... shocking labor shortages caused by offering below market clearing wages. Shouldn't that be one of the first thoughts on a liberterian leaning econ-blog....

ralph

Agreed with Dave. There are tons of jobs not being filled, but it's important to say, "at the wages and under the conditions offered." Eventually, should the economic situation remain dire, those jobs will be filled, and at a lower rate than they are currently offering. Right now, they're not worth it to the people who are able to fill them.

I do understand that this blog will be sympathetic with the argument that basically other payments -- the most irritating ones are state payments -- are disincentivizing otherwise good workers from taking them. I just disagree that this is a big problem. It wasn't one in 2007.

Matt

These are just anecdotes. The point is that when you enter a massive and unabated recessions you should expect unemployment- you do not need to resort to complicated psychological-moral theories of why there is unemployment. Scott Sumner has made this point repeatedly, in case that matters. If gdp growth was not -10% below trend, then you would need to explain unemployment.

If Tyler is trying to present a more general and radical theory of why all unemployment is voluntary all the time, from 1800-2011, that is fine, but I take it that these posts a given and received as explanations of why this downturn is uniquely the "fault" of the unimpressive unemployed.

Hillary

Most of the jobs on that first list are for national companies, although they might be looking for long haul truckers based out of ND. $75k sounds high to me for a new OTR driver, although it's right for an experienced private fleet driver.

These are not attractive jobs. The runs average 8 days away from home with one day off for long haul. A driver with pedal runs will be gone for two or three days. While they're working, it's up to 11 hours driving with three extra legal hours of wait time.

Attorney at Flaw

Drivers violate those rules anyway. I have one file where a trucker rear-ended a sedan, killing the occupant, then tried to destroy his log book to cover up his violaiton. I have another where a trucker driving in violation of those rules fell asleep at the wheel, drove off the road and died.

Hillary

I agree that they violate hours, but it's a lot harder to violate as companies move to electronic on board recorders (which will probably be mandated next year). Tampering with an EOBR results in very large CSA violation points and will also get a driver fired.

Attorney at Flaw

Sebastian H

Since these jobs appear to require that you own a long haul truck cab, isn't the moral of the story that not enough people have the ~$40,000 required to purchase a long haul truck cab? Or is there another moral?

Bill

Why look to a state you would not want to move to and look to states that you would and which are doing better than the national average?

I am in a state with high educational attainment and with unemployment two points below the national rate, and its citizens do not have to be truckers but can work in technology, manufacturing, etc. Unemployed per vacancy is pretty good too.

All you need are citizens willing to invest in education for their kids, some regulation that prevented predatory lending, and efficient government that provides services to their citizens who are willing to pay for these services.

Life is good.

You can pick out a state that you would rather live in by looking at state UI data here: http://www.bls.gov/web/laus/lauhsthl.htm

Lazy Federal Employee Posting from Work

Mikeh

Yes, the Adam Smith Invisible Hand award. Only it can't be revealed that you have received it.

The media is in it to "sell papers", but I think (hope) anyone with a little practical experience knows markets aren't frictionless. The US labor market is likely one of the most mobile and yet there are still normal costs and the current situation cost of a lot of mortgage overload (I know numerous people renting who own a house elsewhere they are renting - maybe a new normal?). Then again, from some earlier comments hinting about people unwilling to move because of socialism, maybe some people just don't get it.

Bill

Yes, you qualify both for the Commerce Clause Award and the Lawyer Interstate and Foreign Commerce Travel Award.

If you had to take the local bar exam as an attorney from another state, you also qualify for the Multi-State Interstate Barrier to Entry Award given by local attorneys to keep other attorneys out of their jurisdiction.

Attorney at Flaw

notusuallyanon

Ha, my quasi-step mother (in her 50s now) works in Illinois and has had to do so many cases in California she apparently would have to take the Cali bar to do another one. I guess they love suing banks over there.

NAME REDACTED

Anon

RW Force

Talking with a cousin who owns a trucking company. The problem is getting insurance. Insurance companies won't insure drivers who lack substantial experience, even those with trucking school certification. How do you get experience if you can't drive without insurance? Not their problem.

anonymous...

With this sort of anecdotal information, we can begin to explore the real underlying reasons. More please. And perhaps some aspiring economist out there might do a systematic follow-up?

When lucrative jobs are going begging despite the existence of a large potential pool of candidates, I suppose you could posit that every single one of the millions and millions of unemployed nationwide is too uninformed, too stupid, too lazy, too rooted to one spot, too drugged-up, or too whatever. Or you can apply Occam's goddamn Razor and deduce that there is probably some hidden regulatory obstacle that shuts those would-be candidates out. Qualified or not, the jobs are, in practice, out of reach for them.

An example of this (albeit secondhand information, and filtered through ten years of lapsed memories): after 9/11, there was a boom in what you might broadly define as the "national security" industry. The catch, of course, was that a security clearance was an absolute must.

If you already had a security clearance in connection with your current job, this was no problem: apparently it transferred over in a straightforward way. But if you didn't, the only way to get one was to first get hired and then for your new employer to sponsor you; in other words, unaffiliated individuals absolutely were not allowed to apply for one on their own, nor to continue to hold one soon after ceasing to be employed by any sponsoring company. So the company had to hire you and then pay you to spend several weeks sitting in a room all day reading magazines (literally!) until your security clearance came through and you could actually perform any work.

The problem was, after 9/11, the authorities greatly tightened up and lengthened the background checks and other procedures that went into granting a security clearance. That, combined with the sudden industrywide need for hiring, created an enormous backlog. Instead of weeks, now a prospective employer had to pay you to do nothing for many months or even a full year or more, without even any guarantee that the clearance would be granted in the end.

Very few employers were willing to do so, and the result was predictable: highly qualified people found themselves shut out completely, while companies engaged in a poaching frenzy and bidding war, hiring away each others' existing employees at great expense.

Even people who had extensive prior industry experience (including eminent cryptographers) were shut out, because their previous security clearances had obligatorily lapsed for lack of sponsorship if they had taken civilian jobs in the interim, for instance in dot-com companies. And under the new reality they had no way of getting new ones.

So... back to the present day. If companies are really paying $75k salaries, I suspect that perhaps it's because they are forced for some reason to only try to hire away their competitors' truck drivers rather than because that's what it takes to incentivize even one unemployed bum to switch off the TV and shuffle his lazy ass over to North Dakota.

Matt

Is truck driving the only skill they are looking for? I just graduated with a Bachelor's in Communication, and would love to make 50,000+ I don't have a CDL and it seems like you pretty much need one for any the jobs posted, but I would do pretty much anything there if it paid high enough. I guess that is Tyler's point.

bxg

How do you expect anyone to give a useful response to this? Sure, there are many good jobs in ND for people without a CDL. But do you expect someone to assemble - just for you, just on this blog - a fully matrix of all possible skill-set vs jobs in North Dakota? It would be just a tiny bit less lazy to perhaps enumerate, or even hint at, what your skills are!

Bill

You can apply for that trucking job c/o Tyler Cowen, this website, between the hours of 8am and 5pm, Mon through Friday. This website is committed to make the market work.

This message brought to you by the North Dakota State Department of Employment and Labor, an Equal Opportunity Employer.

On a further note, GMU will be developing a communications program leading to the granting of a Commercial Drivers License and BA degree in communications this fall and will be instituting an exchange program with NDSU later in the winter.

Bill Harshaw

Along the same lines, I know the State unemployment agencies were originally (pre-WWII) focused on local jobs. Given the inertia in bureaucracy, I wonder whether these agencies have moved into the Internet age and are now providing information on jobs available nationally, or internationally for that matter?

Attorney at Flaw

I'm sorry, that was rude. What I mean to say is, I pay some attention to the news and I had not heard of opportunities in the transportation industry in North Dakota. But I am not unemployed. Hmm. When you have been unemployed, have you used the internet to look at every single job posting from everywhere in the United States, whether or not it is in your line of work? Or have you mostly used it to look for jobs in your line of work somewhere near to your home, or at least in your state? WRT unemployment offices, I just emailed a friend who was recently on unemployment, but now has a job. He looked at the umployment office's job posting, but had not heard of those ND jobs either.

Urso

Potential worker

Why work if you can get money food and health care for nothing? Isn't being alive and dealing with unwanted babies drug addiction jailtime arrests and violent spouses work enough? And the gas prices these days. How will I get to North Dakota? You dont expect me to take a Greyhound bus.

Bill

Actually, what is interesting in reading the comments to this post is that many of the commenters offer proof of the premises of Akerloff's new book which incorporates sociological concepts of identity into personal utility models.

Many of the respondents, including the recently graduated communications major without a job, were torn between their concept of their identity and the straight up value of the $75k, and that's the point: classical models assume a utility function that is only dependent on money, but do not take into account the persons image of themselves, ie, their own identity. That may explain why people do not take a better paying job, and stay with a lower paying job, because one job would conflict with their identity.

A pretty well grounded microeconomist, now a prof in marketing, is doing some work with another economist to incorporate sociology into micro price adjustment models. You can view it as introducing friction into classical adjustment processes or you can view the classical model as not too representative of human behaviour and one needing of adjustment.

David

Unemployment benefits are very low. For example, maximum benefit in Michigan is $362/week. For a family of four, that puts you $4,000/year BELOW the poverty level.

A lot of people get less than this. If you had a full-time, minimum wage job before you got laid off, your unemployment benefit is only $175 per week. That's well under HALF the poverty level.

If $75K/year jobs were freely available, I can't imagine anyone choosing to stay in poverty just because of unemployment benefits. I am very skeptical that the average unemployed person could land such a job.

Three quarters of all families make less than $75k. And they don't flock to ND even in a booming economy. The barriers to relocation are high, and the quality of life there is low.

Popeye

While the trucking industry, hit hard by The Great Recession, is beginning to show signs of life, good jobs in the profession are still can be hard to come by. And if you do get a job expect to pay your dues and start at the bottom with low pay (as little at $25,000 starting out) and endure tough working conditions, including weeks on the road. Median pay for all truck drivers (regardless of experience) is $38,000, according to the Bureau of Labor Statistics.

Nah, that sounds absurd.

So before the recession hit, naysayers were just haters who were afraid of how Wall Street was helping poor people. And after the recession hits, we have high unemployment because people would rather sit around at home making $20k for a year or two on unemployment benefits than work hard and become millionaires driving trucks in North Dakota.

I would think that when George Mason econ professors go out to lunch, there would be a lot of "Aren't we absurdly lucky to be making 6-figure salaries despite having no idea what we're talking about? Isn't life just ridiculous sometimes?" But no, apparently there's a lot of "Wow, you're the smartest and most profound thinker I have ever met!"

kharris

When a headline helps Tyler tell (or imply) a story, no economic reasoning or firm belief that markets work will be applied. If there are jobs paying $75k that many unemployed people are qualified to take, then there is a market failure. QED, unless you try not to think about it.

Another option would be skepticism. Aren't there firms which fish for resumes by listing attractive jobs that don't really exist? Last time I heard, there were. Are there costs and risks associated with moving to another location for a job, without knowing whether you could get it? Last time I tried it, there were. (Had to move a second time.) Don't most households own all or part of a home in a very bad real estate market, which gets in the way of moving? Last I heard, that was a widespread problem.

So what, exactly, does Tyler want us to glean from his thin little story? Entrepreneurs are driven by heroic market forces, while unemployed people are shackled by poor virtue and too little gumption? There is no weakness in the labor market, once we find out about the limitless opportunities in truck transport in the thinly populated areas of the country? That some people hate Art Deco so much that they'll forgo employment just to avoid it? So many choices...

gamesliga

Barnyard

Does anyone know the name of some of the companies hiring? Do you have to have a Class A w/ truck? I have a Class B & would be interested in checking in to a job if the money is worth leaving my home & wife in Indiana for nine months to a year at the most! I just don't want to go out there only to find out that I can't afford to pay my mortgage at home & put money away to pay-off debt's!